A new chemical remediation tank is needed. Current technology tanks, which cost $150,000, must be drained and treated every 2 years at a cost of $30,000; the tanks will last 10 years, and each will have a salvage value of 5% of first cost. A tank with new technology has just come on the market. There are no periodic maintenance costs, and a tank will last 20 years. If the new tanks cost $325,000, what minimum salvage value, as a percentage of first cost, would be required for this technology to be a better option? Use a 12% interest rate. (a) 10% (b) 36% (c) 57% (d) 72%?

A new chemical remediation tank is needed. Current technology tanks, which cost $150,000, must be drained and treated every 2 years at a cost of $30,000; the tanks will last 10 years, and each will have a salvage value of 5% of first cost. A tank with new technology has just come on the market. There are no periodic maintenance costs, and a tank will last 20 years. If the new tanks cost $325,000, what minimum salvage value, as a percentage of first cost, would be required for this technology to be a better option? Use a 12% interest rate. (a) 10% (b) 36% (c) 57% (d) 72%?

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter9: Pricing Construction Equipment

Section: Chapter Questions

Problem 6RQ

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